China Biofuel Industry Provides Opportunities in Agribusiness

Business News/Analysis, China, Funding/Financing/Investing

February 10, 2010

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(RightSite) As China’s solar and wind power sectors grab headlines, leading agribusiness companies are grabbing a foothold in China’s biofuel sector. As oil prices threaten to rise in years to come, China’s drive to create a biofuel industry that does not include use of foodstocks is gaining fans among foreign investors.

…(T)he Chinese government still sees potential benefits from biofuel energy development, provided that this development is based on production from non-food stocks. Given the country’s requirements for alternative energy sources to feed its rapid economic growth, and the global need to reduce the negative impact of industrial activities on climate, in 2007 the government put in place a national goal of having biofuel, which now only accounts for 2% of fuel consumption, account for 15% of fuel used by 2020. In addition, the authrorities have also pledged as part of the Copenhagen agreements to cut carbon emissions by 40-45% compared to 2005 levels. This commitment translates into an investment of at least 1% of GDP (RMB 240bn) into China’s clean energy sector in the next five years.

… China’s push on biofuel will be focused on production made from non-food feedstocks such as waste oil, vegetable oil and jatropha. As a country that has a population of more than 1.3 billion, stable food supply is the primary concern of the Chinese government. READ MORE

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